China to Acquire Another East African Energy Foothold?

Beginning in 2001, then U.S. President George W. Bush declared a "global war on terror," which saw U. S. military forces into regions where it previously had no presence.

One of the areas of concern to the U.S. military was Africa, where in 1977 the United States established an embassy in the East African horn of Africa state Djibouti. Since then the Republic of Djibouti's government has consistently supported U.S. and Western interests, from the 1990-91 Gulf crisis. After the 11 September 2001 U.S. terrorist attacks, the following year Djibouti agreed to host a U.S. military presence at Camp Lemonnier, a former French Foreign Legion facility that now houses approximately 1,800 American personnel.

But the cash starved government is looking further afield than Washington for economic support, and, like many African countries, China is an alluring prospect.

On July 24 the Djiboutian Information Agency reported that Djibouti's Minister of Energy in Charge of Natural Resources Ali Yacoub Mahamoud met with Chinese Ambassador to Djibouti Fu Huaqing to discuss cooperation in the energy sector, emphasizing possible geothermal and renewable energy projects. During the discussions Mahamoud emphasised Djibouti's interest in developing geothermal energy capacities with the intention of producing 100 percent of the nation's energy needs from renewable energy sources by 2020. Ambassador Fu responded that China remains committed to supporting Djibouti's energy initiatives for the "mutual benefit of both countries." Seeking to bolster its renewable energy sector, Djibouti has also been discussing potential geothermal cooperation arrangements with the World Bank, Japan, Turkey and Libya.

For Djibouti, the U.S. military presence is increasingly overshadowed by China's interest in developing the country's energy potential. Djibouti has made several attempts to harness the country's geothermal potential, starting as far back as the 1970s. Besides China, other institutions interested in Djibouti's geothermal energy include the International Development Association, the French Agency for Development, the African Development Bank, the Sustainable Energy Fund for Africa, the Energy Sector Management Assistance Program, the Global Environment Facility and the OPEC Fund for International Development.

By. Joao Peixe of Oilprice.com